Recovering all wages lost in furlough, layoff or termination

Q:        Because of the Stay-at-Home order in California, my employer has sent me home on a “work furlough” without pay. It has been more than a month and I still have not been asked to go back to work. Is a work furlough a termination? What are my rights?

A:        The COVID-19 pandemic threatens, not just employee’s health and safety, but also their economic stability. There are reportedly more than 30 million workers who have filed for unemployment benefits since the start of lockdowns. California has seen the highest number of job losses. Of the state’s estimated labor force of about 20 million, nearly 4 million Californians are claiming unemployment benefits.

Workers who lost their jobs, may have lost them temporarily or permanently. Some companies have placed employees on a work furlough. Others have done layoffs. Still others have closed shop entirely and terminated their workers.

A work furlough is “a temporary layoff from work.”  Furloughed employees are expected to return to their jobs. They are generally not paid their wages for the duration of the furlough, but may continue to have their health insurance, or other benefits. A furlough ends when the employer tells the employee to report back to work.

A layoff is a discharge, where the employer dismisses the employee from employment. It is the term used when the employee’s separation from the employer is due to reasons other than the employee’s job performance. Layoffs generally occur when the business is not doing well and causes the employer to cut down on its staff. A business closure may result in mass layoffs.

A termination generally refers to the involuntary discharge of an employee, with the decision made by the employer, with or without cause. This contrasts with a voluntary discharge, which is often called a resignation. By its nature, a termination is a permanent separation from employment.

Are all wages paid?

Whether furloughed, laid-off, or terminated, or even upon resignation, the employee is entitled to receive payment of all wages due at the time the employment ends. The following questions should then be asked:

1.  Has the employer paid the employee for all work performed beyond 8 hours per day or 40 hours per week?
2. Has the employer paid the employee premium wage penalties for missed meal and rest breaks?
3. If the employee was eligible for vacation, has the employer paid unused vacation time? (Note: “Use it or lose it” vacation pay policies are illegal.)
4. If commissions are due, has the right amount been determined?
5. Were all deductions on wages proper?
6. Are there expenses that have to be reimbursed to the employee?
7. Does the employer have a policy or practice of paying separation pay?

Should employees sign a release?

Employers are prohibited from requiring employees to sign a release of the employee’s right to any wages due, unless those wages have been paid. Some employers hold their employee’s final paycheck “hostage” until the employee signs a release or other document. This conduct is prohibited by law.

Many employees lose valuable rights when they sign a release. If employees are pressured to sign documents, employees should request that they be given time to review the documents more carefully, or have an opportunity to consult with counsel.

If an employer willfully fails to pay all wages due to an employee after termination, the employee’s wages continue as a penalty until paid, for up to 30 calendar days. This is called “waiting time penalties.” Hence, if the employee who works 8 hours a day is paid $20 per hour, the employer may be held liable to pay up to $4,800 in penalty for not paying the terminated employee on time.

If an employee thinks that his or her rights have been violated prior to, during, and even after a (temporary or permanent) separation from employment, it would be smart for that employee to consult with a knowledgeable and experienced employment attorney to protect his or her rights.

The Law Offices of C. Joe Sayas, Jr. welcomes inquiries about this topic. All inquiries are confidential and at no-cost. You can contact the office at (818) 291-0088 or visit www.joesayaslaw.com. [C. Joe Sayas, Jr., Esq. is an experienced trial attorney who has successfully recovered wages and other monetary damages for thousands of employees and consumers. He was named Top Labor & Employment Attorney in California by the Daily Journal, consistently selected as Super Lawyer by the Los Angeles Magazine, and is a past Presidential Awardee for Outstanding Filipino Overseas.]